On March 27, 2020 the CARES (Coronavirus Aid, Relief and Economic Security) Act was signed into law. Shortly thereafter the Treasury Department started sending out Economic Impact Payments in the form of direct deposits or paper checks. Some of these payments were made to deceased individuals. There was a lot of confusion as to whether estate executors or family members of the deceased could keep the stimulus payments. The answer is No. The IRS updated their information center webpage this month to explain that anyone who died “before receipt of the Payment” is NOT eligible for the stimulus payment and those monies MUST be returned to the IRS.
If the stimulus payment was made to the surviving spouse of joint filers then only ½ of the payment must be returned (the portion payable to the decedent).
You can return the mistaken payment by either writing “VOID” on the back of the paper check issued by the US Treasury OR if you have already cashed the check or if it was a direct deposit you will need to submit a personal check, money order, or cashier’s check made payable to the “U.S. Treasury”. Be sure to write “2020EIP” and the taxpayer identification number (Social Security Number or Estate EIN) on the check and include a written letter as to why you are returning the check. Keep a copy of everything for the estate and/or your personal records.
The returned stimulus payment is to be mailed to the appropriate IRS address which is based upon the state you live in. You can locate that address on the IRS’ Economic Impact Payment Information Center (See Question under “More About the Economic Impact Payment”: “What should I do to return an Economic Impact Payment?”) linked here.
While an estate you administer or a deceased family member may not have received a stimulus payment yet, the first wave of payments is still being issued and there is anticipation of another COVID-19 relief act being passed which may include additional payments; so be aware of any direct deposits made or checks sent in the name of the deceased.
You may also contact our office and we can answer any questions you may have about this erroneous payment, how to return it and any other estate or probate questions you may have at this time.